Washington--The
Bureau of Alcohol, Tobacco and Firearms (ATF) announced that the Distillery
Basic Permit issued to Jenkins Spirits Corporation will be suspended for
90 days due to the company's involvement in illegally selling liquor to
the St Regis Mohawk Indian Tribe, which is located in northern New York.
The suspension comes as a result of an ATF Decision made after the Jenkins
Spirits Corporation admitted that they violated the conditions of their
Federal Alcohol Administration Act and their ATF Basic Permit by illegally
introducing liquor into "Indian Country". The ATF Ruling held that Jenkins
Spirits Corporation violated the Webb Kenyon Act and the 21st Amendment,
by shipping liquor into New York State in violation of State Law and that
Jenkins violated the Internal Revenue Code by failing to keep accurate
sales records. The Jenkins Spirits Corporation previously paid ATF $60,000
in an Offer In Compromise settlement, alleging similar charges, in 1996.

In addition
to the Federal civil action against Jenkins, the corporation also pled
guilty to the Federal criminal charge of aiding and abetting the unlawful
introduction of liquor into "Indian Country" and will have to pay a $100,000
fine. The company pled guilty, to the criminal allegation, on January
24, 2000 in Syracuse, New York before Chief U.S. District Court Judge
Thomas J. McAvoy after being charged with selling over 73,000 cases of
liquor to individuals at the St. Regis Mohawk Indian Reservation. The
charge alleged that Jenkins Spirits Corporation, which is located in Londonderry,
New Hampshire, exercised willful blindness and conscious disregard of
the fact that the liquor was being unlawfully introduced into the reservation.

The St.
Regis Mohawk Reservation, located along the U.S. and Canadian border has
been the focal point of large scale alcohol and tobacco smuggling operations,
since the early 1990's. The alcohol and tobacco is generally smuggled
into Canada in an attempt to evade the payment of higher Canadian excise
taxes. Over the past three years alone more than 20 individuals have pled
guilty for their participation in schemes to smuggle alcohol and tobacco
to Canada through reservation territory. The charges included money laundering,
currency reporting violations and defrauding the United States and Canada
of taxes owed. The schemes utilized warehouses on the St. Regis Mohawk
Indian Reservation as staging areas for the smuggling operations. The
alcohol and tobacco was then smuggled across the border into Canada and
distributed unlawfully throughout the country.

The suspension
of Jenkins Spirits Corporation Distillery Basic Permit represents the
continued and intensified enforcement by ATF to take action against the
ATF regulated industries members involved in illegal alcohol and tobacco
diversion.